In many services ... overnight delivery, dry cleaning, fast foods ... the "product" of the service has become a commodity, and commodity pricing rules prevail: To the low-priced go the spoils.
But in millions of other services, pricing is a not-so-simple matter of "What Will the Market Bear?"
A lot it often seems. A friend marvels at his older brother, who earns a million dollars a year telling companies like Coca-Cola what the future might be. Someone else charges $750 an hour to read, think and occasionally argue cases before the Supreme Court. Film directors, great photographers, top consultants, and many others charge enough to buy Monets.
What is talent and thought worth .... and why is some worth so much? What can you reasonably charge? Good questions. Before you answer them, consider this story about Pablo Picasso:
A woman was strolling along a street in Paris when she spotted Picasso sketching at a sidewalk cafe. Not so thrilled that she could not be slightly presumptuous, the women asked Picasso if he might sketch her, and charge accordingly.
Picasso obliged. In just minutes, there she was: an original Picasso.
"And what do I owe you" she asked.
"Five thousand francs," he answered.
"But it only took you three minutes," she politely reminded him.
"No," Picasso said. " It took me my whole life."
Don't charge by the hour: Charge by the years.
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